MBT: PUERTO RICO

House Bill 5734

Sponsor:  Rep. Rebekah Warren

House Bill 5735

Sponsor:  Rep. Lorence Wenke

House Bill 5736

Sponsor:  Rep. Jeff Mayes

Committee:  Tax Policy

Complete to2-19-08

A SUMMARY OF HOUSE BILLS 5734-5736 AS INTRODUCED2-14-08

The bills would amend the Michigan Business Tax Act to make changes in several of the act's definitions with regards to theCommonwealth ofPuerto Rico.  Reportedly, these changes will treat operations inPuerto Rico as operations outside of theUnited States and as foreign entities for purposes of the MBT.

House Bill 5734 would amend the definition of "commercial domicile" in Chapter 2B (dealing financial institutions) to remove a reference to theCommonwealth ofPuerto Rico.  (MCL 208.1261)

House Bill 5735 would amend the definition of "foreign operating entity" in Chapter 1 (Definitions).  Currently, that definition refers in part to firms with substantial operations "outside the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States," or political subdivisions of any of those.  The bill would instead refer to operations "outside the United States, the District of Columbia, any territory or possession of the United States except the Commonwealth of Puerto Rico," or political subdivisions of any of those.  The underlining represents the new language.  (MCL 208.1109)

House Bill 5736 would amend the definition of "state" in Chapter 1 to exclude theCommonwealth ofPuerto Rico.  (MCL 208.1115)

FISCAL IMPACT:

There is not enough information available at present to determine the potential fiscal impact.

                                                                                           Legislative Analyst:   Chris Couch

                                                                                                   Fiscal Analyst:   Jim Stansell

■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.